DEFINITION of 'Broker Price Opinion (BPO)'

A broker price opinion is the estimated value of a property as determined by a real estate broker or other qualified individual or firm. A broker price opinion is based on the characteristics of the property being considered.

BREAKING DOWN 'Broker Price Opinion (BPO)'

Broker price opinions are not used or allowed in every state. Laws may prevent brokers from providing this service or block them from charging fees to perform this duty. Brokers may seek training to conduct and issue price opinions but that does not necessarily make it legal for them to provide this service. State laws may limit the use of broker price opinions to specific circumstances.

Some of the factors that a broker will consider when developing a price opinion include the value of similar surrounding properties and sales trends in the neighborhood. The location of the property and its place among its surroundings factor into the opinion. Comparable listings and recent sales affect the price opinion for a property. Brokers will also take into account an estimate of any of the costs associated with getting the property ready for sale and/or the cost of any needed repairs. It is important to note that a broker price opinion is not the same as an appraisal.

Why Broker Price Opinions Are Sought in Real Estate

A broker price opinion can be requested by a lender who wants an assessment of a property for such needs as the refinancing of a mortgage or a foreclosure. The owner of a property could also seek such an opinion if they are looking to make changes either through a sale or a refinancing of their mortgage. A broker price opinion might be sought because the service could cost much less and be performed more quickly than an appraisal of the property.

Brokers may perform what is known as a drive-by broker price opinion, wherein they only see the property from the exterior. The broker might leave their car, but they will not attempt to enter the residence. An internal broker price opinion is developed by gaining authorized access to the home and reviewing its condition and amenities. This can include taking photos of the property.

In addition to the possibility of being paid to provide this service, brokers may submit a price opinion in the hopes of winning the listing they are assessing. The broker might include a marketing plan for the property when they issue a price opinion to show how they would approach representing the property. Broker price opinions have been regarded as concise alternatives to a comparative market analysis.

RELATED TERMS
  1. Two Dollar Broker

    A two dollar broker is a floor broker who executes orders for ...
  2. Broker's Open House

    A broker’s open house is a showing of a property for sale targeted ...
  3. Business Broker

    A business broker is a company that assists in the purchase and ...
  4. Outside Broker

    The term outside broker has several applications in finance. ...
  5. Listing Agreement

    A listing agreement is a document in which a property owner contracts ...
  6. Broker Of Record

    A broker of record, in insurance, is an agent designated by the ...
Related Articles
  1. Investing

    Picking your first broker

    If you're a rookie investor, choosing a broker may be your first big investment decision. Learn more on whether you should you go with a full-service broker or a discount broker.
  2. Personal Finance

    Advantages And Disadvantages of Using a Mortgage Broker

    Mortgage brokers may be able to find you the loan of your dreams, but you should consider the potential downsides before hiring one.
  3. Trading

    Price Shading In The Forex Markets

    This practice puts brokers ahead of their clients, but it doesn't have to be a negative for traders.
  4. Investing

    5 Misconceptions About Discount Brokers

    While discount brokers are the perfect choice for some investors, their business model could be detrimental to others.
  5. Financial Advisor

    Investment Advisor Versus Broker: How They Compare

    What is the difference between an investment advisor and a broker?
  6. Investing

    How to Choose a Forex Broker: Everything You Need to Know

    Take your time when looking for a forex broker because a bad decision can be costly.
  7. Insurance

    Brokers: Do You Want To Sell Stocks Or Insurance?

    Know the difference between working as a broker or an insurance rep.
  8. Financial Advisor

    Is a stockbroker career for you?

    Discover what you need to become a stockbroker and the variety of opportunities that are now available to you.
  9. Investing

    What Are The Differences Among A Real Estate Agent, A Broker And A Realtor?

    All three work in the real estate field, but there are differences between the job descriptions.
  10. Investing

    Uncovering Hidden Broker Fees

    Even discount brokers can hit you with some fees that seem unnecessary; here are some to watch out for.
RELATED FAQS
  1. Why Do Brokers Ask for Personal Information?

    There are 3 reasons a broker needs personal information: suitability, record-keeping and the law. Read Answer >>
  2. Can a Broker Sell Your Stocks Without Permission?

    In this article, find out if and when it's legal for a broker to sell securities from a customer's account and portfolio ... Read Answer >>
  3. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Answer >>
Trading Center